Newfoundland and Labrador Hydro (Hydro) announced today that Vector Wind Energy Inc. has been awarded a contract to provide 24 megawatts (MW) of wind power to the island from its Fermeuse Wind Project.

"We are now moving forward with two wind projects that will broaden our energy mix on the island and allow Newfoundland and Labrador Hydro to provide electricity to consumers at a very reasonable cost and in a more environmentally responsible manner," said the Honourable Kathy Dunderdale, Minister of Natural Resources. "The province possesses a world-class wind resource and we are looking very closely at how wind can be a significant part of our energy future both on the island and in Labrador. These two projects are an important first step in our development of renewable long-term energy supplies."

"This award will mean almost 50MW of cost-effective, clean, wind energy on the island by 2009," said Ed Martin, Hydro�s president and CEO. "We�ve taken the necessary steps to ensure we deliver value to electricity customers across the island through a competitive and open process. With this second wind project coming on stream, over 12,000 homes will be getting green energy from wind power in Newfoundland."

There were six proposals submitted for the second Request for Proposals (RFP) for 25 MW blocks of wind power on the island which closed at the end of October. Each proposal was subject to a rigorous and thorough evaluation. Hydro has maintained any emissions credits from the project and also has the option to take over the operation at various points through the 20-year contract.

The next step will be to conclude the power purchase agreement with Vector which Hydro expects will take six weeks. The island�s second wind farm has the potential to provide annual energy for 5,500 homes. The project will be located near the community of Fermeuse on the Southern Shore, Avalon Peninsula and will see the installation of 12, two-megawatt wind turbines.

Wind power provides a clean, renewable and stable, long-term source of energy for Newfoundland and Labrador with zero emissions. Energy from the Fermeuse Wind Project has the potential to offset over 130,000 barrels of fuel burned annually to generate power at the Holyrood Generating Station. Combined with the St. Lawrence Wind Project, announced in early October, the two projects will offset almost 300,000 barrels of oil annually and result in a significant reduction in emissions.

The island power system, which is isolated from the North American grid, has a generating capacity of 1,919 MW provided by approximately 65 per cent hydroelectric and 35 per cent fossil fuel generation.

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2006 12 14                                                     12:00 noon